Imagine surviving one of the most traumatic experiences in your life, only to be financially penalized for seeking justice and healing.
Below is a story of a survivor of sexual assault:
"In 2017, my life changed forever. After surviving a sexual assault, I fought to rebuild my life and sought justice through the legal system. I was awarded a $60,000 settlement to help me heal and move forward. But instead of relief, I was hit with a devastating $55,000 tax bill—because my pain and suffering were treated as taxable income."
Emotional injuries are just as real as physical ones. But under current tax law, emotional damages are taxed unless directly tied to a physical injury, punishing survivors for the trauma they've endured.
This injustice impacts survivors of all types of trauma-whether caused by violence, abuse, accidents, or other life-changing events. Up to 37% of emotional damage settlements are taken by taxes-money that should be used for recovery, not penalized by the government.
The Solution
The No Tax on Trauma Act would end this unfair treatment by ensuring emotional injury settlements are treated the same as physical injury settlements-tax-free.
This is not just an issue for survivors of specific incidents; it's an issue of fairness and humanity for anyone who has endured trauma.
How can you help
Join Arella, a nonprofit advocating for all survivors, in urging Congress to pass the No Tax on Trauma Act. Survivors should not have to endure financial punishment for seeking justice and healing. Together, we can:
- Amend federal tax laws to exempt emotional damages from taxation, aligning them with physical injury settlements.
- Recognize the importance of mental health and emotional well-being in our legal and tax systems.
- Ensure fairness and consistency for individuals seeking justice for all forms of injury.
To learn more about this policy and to keep up with our progress, visit us at arella.org/notaxontraumaact.
Sign this petition today to demand change. Survivors of all forms of trauma deserves to be made whole, not further punishment.
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